Indian IT sector has shown signs of recovery with robust Q3 numbers despite challenges from US macroeconomic conditions. Deal momentum and enthusiasm surrounding Generative AI suggest potential for future advancements. Nifty IT Sector historically outperforms with stronger performance in the latter half of each year. Correlation between Nifty IT index and Nasdaq 100 index reveals convergence.
Any negative development on the political front or shifts in interest rate expectations could derail momentum in midcaps and smallcaps and lead to sharp corrections
In theory, when the price-to-earnings (PE) ratio - a popular valuation measure - of a stock or an index is above averages, the stock is considered richly valued and is considered to have limited upsides.